31 January 2024
If you are covering the latest Nationwide house price index, please see the following comment from Karen Noye, mortgage expert at Quilter:
“According to the latest figures from Nationwide, house prices have begun to show signs of increasing once more. Prices rose by 0.7% in January, suggesting the housing market started the year off on a more positive note compared to the end of 2023 when prices remained stagnant. There was also further recovery in the annual rate of change, with house prices down just 0.2%.
“Just yesterday, the Bank of England’s Money and Credit statistics revealed net mortgage approvals for house purchases rose from 49,300 in November to 50,500 in December. While this is only a slight improvement, the increase suggests there is a little more optimism for the upcoming year in comparison to the more dreary outlook for the housing market seen throughout 2023.
“The BoE’s monetary policy committee is due to meet tomorrow and is widely expected to hold interest rates at 5.25%. The Bank’s ‘higher for longer’ stance has resulted in a tricky landscape for prospective buyers, and it is unlikely to lower rates for some time yet - potentially not until the second half of 2024 unless inflation lowers rapidly. However, mortgage deals have been looking a little more palatable as lenders have consistently cut mortgage rates as swap rates have lowered, particularly on fixed rate deals. This is likely to continue as the still low transaction levels feed into a healthy competition between lenders which have been left vying for business.
“The precarious nature of the economy had left many prospective buyers in ‘wait and see’ mode, reluctant to buy a new home in the hopes of securing lower rates further down the line, but we are now seeing tentative signs that people are making a return to the market. Should mortgage rates continue to fall then more may be lured back to the market sooner which would help to buoy prices further.
“For those who are looking to purchase a new property in 2024, seeking professional mortgage advice will be vital. A mortgage adviser can help you navigate what remains a relatively unpredictable market and will ensure you make the best possible decisions for your personal circumstances and goals.”
